The automotive sector plays a vital role in India’s economy, but recent global crises have exposed its vulnerabilities. Restrictions imposed by China on the export of rare earth materials have presented a significant challenge to the industry. Rajesh Agrawal, Special Secretary of the Ministry of Commerce and Industry, stated that this situation serves as a warning to the auto sector, emphasizing the need to domestically produce essential components.
Speaking at the 65th annual conference of SIAM (Society of Indian Automobile Manufacturers), he highlighted the current challenges related to permanent magnets, calling it a ‘wake-up call.’ He stressed the urgency of moving towards self-reliance.
Recent times have seen strong demand from Africa, Latin America, Australia, Gulf countries, and New Zealand. However, disruptions in the supply chain have occurred due to events like the Red Sea crisis and US tariff policies. Rajesh Agrawal clarified that the government is prepared to seek solutions, but the auto sector must take the initiative and actively participate in the global supply chain.
India’s automotive sector faces costs that are 15 to 19 percent higher than its global competitors. Rajesh Agrawal emphasized the necessity of increased investment in R&D to bridge this gap. He believes that if the auto sector takes a lead in technology and fosters innovation, it will be a game-changer for India’s growth, which is a crucial step to achieve the goal of a developed India by 2047.
Sudhakar Dalela, Secretary (ER) of the Ministry of External Affairs, added that while the domestic market is strong, expanding global presence is equally crucial. He further stated that the Indian automobile industry needs to strengthen its foothold, especially in Africa, Latin America, and developed countries.